Finding 371226 (2022-001)

MATERIAL WEAKNESS 2022-001 Account Reconciliations Criteria: An effective system of internal controls over financial reporting requires consistent, timely reconciliations of major general ledger accounts. Condition/context: Several general ledger accounts were not fully reconciled at year end. Cause: Staffing shortages and turn over caused by the COVID-19 pandemic and pending bankruptcy continued to put strain on the finance department by requiring existing staff to perform multiple job responsibilities. This caused a lack of time to perform complete and accurate reconciliations on a timely basis. Effect: Several accounts were not completely reconciled, causing additional work to be necessary, and requiring material adjustments to the financial statements. Recommendation: We recommend management review its current reconciliation policies and procedures to identify any gaps in process or change in roles necessary so complete reconciliations to the general ledger are performed on a regular basis. This will improve current internal reporting and more accurate year end reporting. Views of management and planned corrective action: Management agrees with the recommendation. We are working on bolstering our finance team to be able to adhere to already established reconciliation process that includes all reconciliations are done in the recommended time frames after the standard entries are done.